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The Fifield case caused much controversy in the legal community, but Neal C. Zazove & Associates is here to explain the confusion and remedy your concerns about Illinois law regarding Non-Compete Clauses.

What does this mean FOR ME as an EMPLOYEE or EMPLOYER?

The Appellate Court’s ruling can be analyzed from two different perspectives. Employer’s should review their noncompete agreement and find a way to strengthen their restrictive covenants to adhere to new Illinois law and be deemed enforceable. To be deemed enforceable, it may be necessary for employers to consider offering various forms of alternative consideration. For instance, offering stock options, severances, and annual bonuses are values of consideration, as are promotions and job title changes. Furthermore, it is important for employers to make sure noncompete clauses adhere to the reasonableness standard of Illinois law. It may be beneficial for employers to adhere to a different legal forum and consider another state law to govern its noncompete agreement.

An employee should be cognoscente of the fact that because of Fifield, many employers will be using different forms of consideration to adhere to Illinois law. It may be important to review your noncompete clause and determine what legal rights you may have if, when, and how you choose to leave your employer.﻿

﻿﻿What happened in Fifield v. Premier Dealer Services Inc.?﻿﻿

Eric Fifield was an employee of Great American Insurance Company and assigned to work exclusively for Great American’s subsidiary, Premier Dealership Services. Before his employment with Premier, as a condition of his employment, Fifield signed an “Employee Confidentiality Inventions Agreement,” which included a noncompete clause. The agreement stated that Fifield would be restricted from working for Premier’s competitors for two years following Fifield’s leaving the company. An additional provision was added to the agreement. Specifically, that the noncompetition provision would not apply if Fifield were terminated without cause during the first year of his employment. After signing the agreement, Fifield worked for Premier over the next three months.

At the end of three months, Fifield resigned with two weeks notice, and began working for Enterprise Finance Group (“EFG”). Shortly thereafter, Fifield and EFG filed for declaratory relief under section 2-701 of the Illinois Code of Civil Procedure, claiming that the noncompete clause was invalid and unenforceable due to lack of consideration. After oral arguments and motions, the Appellate Court affirmed the circuit court’s decision, in favor of Fifield and EFG.

Illinois Appellate Court’s reasoning for this decision

Iinois courts carefully scrutinize postemployment restrictive covenants because they operate as partial restrictions on trade. In order for such covenants to be valid and enforceable by an employer, the terms of the covenant must be reasonable. (Cambridge Engineering, Inc. v. Mercury Partners 90 BI, In, Inc., 378 Ill. App. 3d 437, 447, 879 N.E.2d 512, 316 Ill. Dec. 445 (2007)). The Appellate Court focused its attention solely on whether there was adequate consideration to support a restrictive covenant in the noncompete agreement.

Generally, Illinois law states that when an employee has worked for a “substantial period of time,” sufficient consideration is met, and the employer can enforce the noncompete clause. In the past, various Illinois courts have upheld the notion that two years constitutes adequate consideration, but seven months does not. (Brown & Brown, Inc v. Mudro, 379 Ill. App. 3d 724,728,887 N.E.2d 437, 320 Ill. Dec. 293 (2008)). The court further noted that how the employee leaves the company, whether voluntary or by termination, is irrelevant. The court concluded that being employed slightly longer than three months is far too short of the two-year requirement by Illinois law for adequate consideration.

Owning a home is an extremely valuable asset and upgrading your home may improve its overall value. However, if construction is not properly completed, you may suffer financial and emotional frustration. Whether work performed by a contractor is of poor quality or does not adhere to proper building codes and regulations, it’s important to protect yourself and understand your contractual rights before signing with a contractor.

What To Do Before Signing with a Contractor:

In Illinois, home repair or remodeling contracts exceeding $1,000 requires a written, signed contract. The contract must state total cost, parts and materials, and any charge for an estimate. The Attorney General suggests that before signing a contract, the agreement should contain:

(1) Contractor’s full name, address, and phone number(2) Description of work to be performed(3) Detailed list of all materials(4) Total cost of work performed(5) Oral promises made(6) Description and process of change orders(7) Starting and completion dates(8) Payment schedule(9) Warranties or guarantees

Before Hiring a Contractor

The Attorney General recommends consumers follow at two-step process before hiring a contractor: (1) determine the scope of the work to be completed; and (2) create specifications for the home improvement you want completed. Determining the scope of the work needed is as easy as writing down the necessities you want completed. By doing this, you avoid a contractor pushing unnecessary work on you. Write down specifications, such as, the time frame of the job to be completed, materials you want used, how you wish to make payment(s), and use of subcontractors.

Three Day Right to Cancel Home Repair

If you hire a contractor, you have the legal right to cancel the contract within three business days. The unique aspect of this provision is that the contractor has no legal right to take away your three day right. Generally, you are allowed this right, but exclusions like emergencies and prior contact by the consumer may apply. For more information, visit: http://www.illinoisattorneygeneral.gov/consumers/3dayright.pdf

Key Things to Look Out For:

DO NOT “pay up front”: Instead of paying a contractor “up front,” devise an installment plan in your contract to pay the contractor after work is completed in detailed segments.

Estimates: Receive a few estimates from other contractors to evaluate what needs to be completed. Remember, receiving estimates or price quotes are usually not offers, however, you may want to consult an attorney before signing documentation.

Lawsuit: Check with your insurance company to determine if you are covered for any injury or damage that may occur while the contractor is working. You may wish to discuss personal injury liability with your attorney before signing a contract.

Full Integration: Before signing a contract, insist on a complete, written, signed contract (full integration) to have specificities in writing. Reducing your writing to a full integration may legally help you via the Parol Evidence Rule if problems arise.

Subcontractors: Do not let a “mechanic’s lien” be placed on your home. If your contractor does not pay the subcontractors, you may be held liable.

Protect Yourself: There are specific conspicuous phrases Illinois law requires in a home improvement contract. Contact your attorney to make sure specific clauses are in your contract before signing.

Keep a log: Keep record of all phone conversations, discussions, and correspondence with your contractor. If problems begin, documentation may assist you.

“Notice of Cancellation”: Illinois law requires a “notice of cancellation” clause in your contract that allows you to cancel the transaction at any time within three days.

You are not alone! Over 20 percent of complaints received by the Office of the Illinois Attorney General involve home repair contractor disputes. If you or someone you know has questions involving a home improvement project, call or email Neal C. Zazove & Associates to review and advise you of your rights before signing with a contractor.

Have you earned COMMISSION or WAGES that have NOT been paid to you

Commissions and Wages Legal Rights

You have a legal right to be paid your wages and commissions. It may not be a valid excuse that the company did not have the money, especially if they paid other bills and other employees. Whether the employer is currently conducting business, in the process of bankruptcy, or no longer in business, you may still bring legal action to obtain your unpaid, earned wages or commissions. Although the company itself may be held liable, an executive, or even a manager of the company, may be personally liable for your unpaid wages or commissions. The Illinois Wage Act also provides the recovery of attorney’s fees and interest, in addition to your unpaid wages or commissions. Neal C. Zazove and Associates created a Step-by-Step instruction below to determine whether you may be eligible to obtain your unpaid commissions, wages, and attorney’s fees: Step 1: Were you previously an employed?An “employee” is considered a person hired to render services. This includes, but is not limited to, positions like: Salesperson; Transit man; Mechanic; Artisan; Miner; Laborer; etc. Step 2: What kind of wages or commissions may I have a legal right to?You may be entitled to recover any of the following: • Commissions and bonuses • Insurance benefits• Reimbursement for back pay• Severance pay• Unused vacation time • Compensation during the notice of termination period • Health insurance premiums Step 3: I was employed and I deserve monetary compensation, now what?You can only recover wages and attorney’s fees if you strictly comply with the requirements of the Attorney’s Fees in Wage Actions Act. In order for you to receive the compensation you deserve, call Neal C. Zazove and Associates to hear how we can file the proper claim for you.

Sales Representatives: You Deserve Your Commission

There are two ways in which the Illinois Sales Representative Act (“IRSA”) allows for Sales Representatives to obtain unpaid commissions. First, IRSA summarily states that Sales Representatives who sold products (not services) may have a right to unpaid commissions even after your employment is over. Second, a Sales Representative who sold the product/property or played a major role in selling the product/property may also have a right to unpaid commissions (“Procuring Cause”). Commission earnings are governed by the IRSA. By law, salespersons are entitled to payment of their commissions within 13 days of termination of a contract between a Sales Representative and principal. If a Sales Representative is not compensated via commissions within 13 days, the Sales Representative may be awarded up to three times the amount of the commissions owed, in addition to attorney’s fees and court costs. If you or someone you know has not been paid wages or commissions, you have various remedies.

Employees and job applicants were shocked when employers began asking for their Facebook passwords so they could login and sift through the employee or applicant's profile. While it’s not clear how many employers were engaging in this practice of requesting or requiring social networking profile passwords and other account information, reports such practices were numerous and on the rise...

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